This paper explores the social and moral physics in Adam Smith’s system of thought. Smith describes a society of commercial strangers that has developed under the pressures of material progress and social and economic expansion and outlines the social psychology of a world that has moved from homogeneity and the exigencies of security to differentiation and the demands of commerce. The new exchange culture is more impersonal and permits great levels of liberty and independence than any stage before it. Smith thought that commercial society could be adequately regulated and held together by the cool virtues, the division of labour, a minimal and properly managed state, a regular system of justice and police and the social physics generated by sympathy and the impartial spectator. Smith approvingly describes an atmosphere permeated, not by the spontaneous vitality of benevolent warmth, but by the constancy of legal rules and the steady constraints of commercial virtues and social decorum. His ideal (proto liberal-commercial) society is more pacific, orderly and predictable than its stadial predecessors partly because its regulating mechanisms are generated outside intensely emotional, exclusivistic and dependency-generating social units like the family, the village, the umma or the feudal estate.